Value Added Tax Act 1994 section 36

Failure of resolution under Provisional Collection of Taxes Act 1968

Section 36 of Schedule 9ZA deals with what happens when a provisional VAT rate resolution affecting Northern Ireland acquisition VAT fails or is reversed, and a lower rate is restored.

• Where NI acquisition VAT has already been paid at a rate set by a provisional resolution, and a lower rate is subsequently restored, the taxpayer is entitled to a refund equal to the difference between the VAT paid at the higher rate and the VAT that would have been due at the lower rate
• Where NI acquisition VAT was chargeable at the provisional rate but had not yet been paid when the lower rate was restored, the VAT becomes chargeable at the lower rate instead, calculated on the same value that would have applied under the provisional resolution
• In both cases, the value used for calculating the VAT remains the value determined under paragraph 8(3) of Schedule 9ZA, regardless of whether the higher or lower rate applies
• Section 90(3) of the VAT Act 1994, which deals with failures of provisional resolutions, is extended so that its provisions also cover paragraphs 18A and 19 of Schedule 9ZA